Litigation Check Before Onboarding a Vendor or Supplier (2026)

Use Case · Procurement · Vendor Onboarding

Updated for 2026 · Claw Editorial

Vendor onboarding usually checks that a supplier is registered, has a GST number, a bank account and the right certificates. None of that tells you the supplier is fighting an insolvency petition, has been sued by three other buyers for non-delivery, or that its promoter faces a cheque bounce case. A litigation check closes that gap before you approve the vendor and build a supply line that depends on it. This page explains why the check belongs in onboarding, what to look for on the vendor and the people behind it, how to run it, and how to read what comes back. Last verified October 2026.

01Why this check belongs in vendor onboarding

A supplier that fails midway through a contract is expensive in a way that is hard to recover. Production stops, a replacement has to be found at short notice, and advance payments can be stuck with a vendor that is itself being chased by other creditors. Standard onboarding checks confirm that a vendor exists and is registered. They do not show whether it is already in trouble.

Litigation is the signal that tells you a vendor may not be able to perform: an insolvency petition means other creditors are already at the door, repeated non-delivery suits mean other buyers have had the same problem, and labour disputes can mean the workforce that makes your product is unsettled. Finding this before onboarding lets you approve with conditions, ask for a performance guarantee, keep a backup supplier, or walk away. See how to do litigation due diligence on a vendor and the vendor due diligence checklist.

02Who and what to search

Registration records and court records answer different questions, and a complete onboarding check needs both. Corporate records tell you who the vendor is; court records tell you what the vendor is fighting. On the litigation side, search:

• The vendor company, including former names and any merged or demerged entities.
• Promoters and directors as individuals, since personal guarantees and cheque bounce complaints attach to them.
• Group and connected companies, where distress in one entity reaches the one you are onboarding.

Confirm the correct legal names and director identification numbers from Ministry of Corporate Affairs records first. For why registration data alone is not enough, see corporate records versus court records in vendor diligence.

03What to look for

The point is not to reject every vendor with a case. It is to spot the matters that threaten supply:

• Insolvency and winding-up: an NCLT petition against the vendor or a group company is a direct threat to continuity.
• Recovery and SARFAESI action by lenders, which shows the vendor is already short of cash.
• Non-delivery and contract suits by other buyers, which show a pattern of failing to perform.
• Labour and employment disputes at scale, which can stall production.
• Criminal and economic-offence matters and repeated cheque bounce complaints against the promoters.
• Tax and quality or consumer disputes that point to a business under strain.

One contract dispute is the cost of doing business. A string of non-delivery suits and an insolvency petition on the same supplier is a warning you cannot afford to miss.

04How to run the check

Vendor disputes can sit in district and civil courts, the NCLT, Debt Recovery Tribunals, labour courts, tax forums and consumer commissions. Each has its own portal, so a complete search by hand, across the vendor and its promoters, is slow, and a procurement team onboarding many suppliers cannot do it one portal at a time.

1. Fix the identities. Confirm legal names, former names and director IDs from MCA records.
2. Search every forum, not just the vendor's home district, for each name.
3. Pull the serious matters forward, by party, forum, stage and amount.
4. Record the search, the names and forums covered and the date, so the vendor file can stand behind the approval.

For a one-off vendor this can be manual. For a supplier base that changes often, a litigation-intelligence tool that searches a list of names across courts at once gives coverage and speed, and the procurement or compliance officer still judges the findings. For the wider frame, see what a litigation check is.

05Reading the result honestly

Keep two honest limits in view. A clean result means nothing was found in these registries, on the date searched, under the names searched; it is not proof that no case exists, so it carries a date and a scope, not a guarantee. And because Indian names repeat, a hit may belong to a different person or company, so a weak name match should be confirmed before it blocks a vendor.

Onboarding is also not the end. A vendor that was clean when approved can be dragged into insolvency a year into the contract, so for key suppliers the better practice is to keep a watch running after onboarding, not to check once and forget.

06Where Claw fits

Claw is an all-in-one legaltech platform for Indian advocates, law firms, and corporate legal teams, combining AI-based case search, an AI legal assistant (Legal GPT), case management, and compliance automation across all Indian courts and tribunals.

For this check Claw runs a dedicated service called ClawScore (clawscore.clawlaw.in), its litigation and criminal-risk intelligence line. You give it a name, a vendor, a promoter, or a whole supplier list, and it returns every matter it finds across 9,102 courts, benches and forums in one scored Excel workbook, with results in under 5 seconds, drawing on 30 crore+ judgments, with Supreme Court decisions from 1950 and High Court decisions from 1990.

The workbook has four parts: a Summary that puts a ClawScore risk band on the vendor (Clean, Low, Moderate or High), a Matters sheet listing each case by forum, case number, parties, status and amount, a Related parties sheet that pulls in directors and guarantors, and a Coverage sheet recording what was searched. Every finding carries a match confidence, and anything below 80% is flagged so you can confirm it is really your vendor and not a similar name. ClawScore runs three checks, company litigation, individual litigation and criminal background, and with constant monitoring you can keep your supplier list under daily, weekly or monthly review, so you are told about new filings, changed movement and hearings, and closed matters after onboarding. Claw does not use your case documents to train its AI models.

Read it honestly. "Nothing on record" means nothing was found in these registries, on the date searched, under the names searched, not that no case exists; a low match confidence means the name may belong to someone else; and none of this is legal advice, so weigh the material findings with your procurement and legal teams.

Create a FREE Claw account to run a litigation check on a vendor and its promoters before you onboard, and use case search across Indian courts to surface matters before work begins.

07Sources and further reading

• eCourts (court case status): ecourts.gov.in
• Ministry of Corporate Affairs (company and director records): mca.gov.in
• National Judicial Data Grid (official government portal): njdg.ecourts.gov.in
• Claw: clawlaw.in

This page is general information, not legal advice. The weight of any finding depends on the facts, so take advice from your legal team before you act.

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